China Steel raises steel prices citing demand

China Steel Corp, Taiwan's largest steelmaker, yesterday raised domestic steel prices for next quarter delivery by 1.4 percent as new infrastructure projects and new housing projects spur demand. And this trend is observed in many countries of the world.

The latest price increase of $ 326 per tonne averaged a fifth consecutive quarter of an increase as CSC took cues from price adjustments from its global competitors amid supply constraints, especially in Asia.

China's Baoshan Iron & Steel Co, Wuhan Metallurgical Corporation and Angang Steel Co recently raised hot rolled product prices by $ 15 to $ 22 per tonne for Q3 contracts, reflecting the hot rolled metal market in China based on Kaohsiung COS said in a statement after the quarterly meeting to set domestic prices.

With Beijing's intention to accelerate infrastructure spending in the second half of the year, rising steel demand will further drive prices up, although some local governments are holding back steel production to cut emissions, the company said.

“There is still room for further global price increases in the fourth quarter given the outlook,” China Steel said in a statement.

ArcelorMittal SA, the world's largest steelmaker, raised its forecast for global steel demand to rise to 2-3 percent this year, down 0.5 percentage points from its January estimate, ahead of the U.S.-China trade dispute, China Steel said.

Steel plate price in the next quarter will increase by $ 575 per tonne, and rebar or wire rod prices will increase by $ 500 per tonne, while hot rolled sheets and coils should see an increase of NT $ 293 per tonne and prices for galvanized sheet products should be increased by USD 103 per ton.

"The 1.4 percent price increase may be slightly below market expectations," Vice President of China Steel Hwang Chien-chi said by telephone. “We have to consider the competitiveness of local customers.”

Domestic steelmakers are facing challenges from rising protectionism and increased trade tensions between the US and the rest of the world, while steel products from Turkey and India have become more attractive after plummeting prices, China Steel said.

Local steelworkers are facing 25 percent punitive tariffs in the US after interim protections last month.